Hi I'm new and need some advice...

iVillage Member
Registered: 11-11-2004
Hi I'm new and need some advice...
4
Tue, 01-17-2006 - 3:38pm

My name is Lori. I've been married for 17yrs, we built our home new and moved in when we returned from our honeymoon. We have a 10 yr. old dd and a 22 mo. dd. We payed our last mortgage payment a month after dd#2 was born. Ever since we moved into this house, we planned on moving on, so we've never done any major improvements because..."we're going to move anyway" My dh works on cars, snowblowers, lawnmowers etc...in his spare time(for money) We have a single car garage, but it stores his Torino (summer car) so he doesn't have alot of room to work, especially in the winter. When my dd#2's maternity leave was over (1yr)I decided not to go back to work. My paycheck wouldn't cover childcare expenses,gas,lunches etc... So in March last year I've started my home daycare business for added income. I bring in approx. $260.00 per week, which I apply to our van line of credit...until Xmas and my pay covered all the gifts(I was so proud..no M/C!!) My husband has a great job, $1400.00 every 2 weeks.

So no mortgage, but we have debt! He broke his back 3 yrs ago and we managed to accumulate quite a bit while he was off. In our 17 yrs. he's also lost his job twice to plant closures, so we've had to struggle here and there.

The thing is, we have an opportunity to build our "dreamhouse" Our mortgage payments would be a bit higher than before, but manageable. It would mean he could have a larger garage to work in, and I could have space for 2 more kids in my daycare. The properties become available this March, and building would begin in June.
My sensible side says...No wait till dd#2 is in school, I go back to work and by then we'll have more of the debt cleared by then. But my other side says...we've wanted this for so long, I'm 40 this year so I'd like to enjoy a new house before retirement!! This new house would also have space for in-law apt. for my in laws who are now in their 70's.

This is the debt we have right now.
Mastercard (5.99%)$7000.00
Line of Credit (6.00%) $9000.00(1st LOC to consolidate and cancel out high interest cards)
Line of Credit (6.00%) 25000.00(purchased Van and had our truck painted(cheaper to get rid of the rust than buy a new one!)

I've advertized for 2 more kids for more income, and asked dh to maybe get some overtime? Should I pay the M/C first, or consolidate the M/C with another for one payment. I want to get as much paid off as possible...even if we have to live on crackers!!LOL

Any ideas? Lori

Lorilori-sig.gif my miracles picture by jelomu

Avatar for cl_beckymk
iVillage Member
Registered: 03-19-2003
Tue, 01-17-2006 - 6:39pm

Hi Lori,


I'm not really sure I have very much advice for you.

iVillage Member
Registered: 01-06-2005
Tue, 01-17-2006 - 8:26pm

Lori, hello and welcome! Congrats on a 17 year marriage! That is wonderful. :-) I am just closing in on my 2nd year of marriage!

I am not really good with crunching numbers, but I say DO NOT buy a new house right now. There will be other opportunities a month from now or a year from now. You and your family have a good set-up right now: fairly stable income, staying home with the little one!

Pay off the debt as much as you can before accruing new debt. That will more than likely help you have a bigger down payment AND a lower interest rate! And if something major happens to DH's job once again, you won't be crushed under the load!!!

Good luck!!!!!

~Aravis~

 

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iVillage Member
Registered: 03-27-2003
Tue, 01-17-2006 - 9:02pm

So--let me get this right....you have no mortgage---right? So what you sell the house for is yours!!

You could always sell your house, pay off the debts and put the rest into the new house. That way---you will only have the mortgage.

Holly

iVillage Member
Registered: 05-19-2004
Wed, 01-18-2006 - 12:10pm

Hi! I felt like I had to tell you my story on building our "dreamhome" because of what happened to us, but I'm in no way telling you what to do.

First, do you claim your daycare money? I ask because I am a waitress and claim only part of my tips (legally)and the bank told us they would not count the other $1000 per month I bring home --- so that hurt us bigtime on the loan amount. BTW, my DH makes the same as yours.

Next, they said our SUV loan of $12k would have to be paid off in order to qualify for a loan of $170K. Other than that we only owe on 2 student loans at $11 K total. No credit card bills or personal loans. So all of the down payment money we have been saving has to pay off the SUV.
Whatever the difference is from the sale of our current home and what we owe would be our down payment now. Hopefully $15K.

You didn't mention how much new homes are in your area~ the one we wanted was $140K but with all of the excavating, tap ins, closing costs, appliances, surveyer, permits etc... it would be around $165-$170K. Plus a temp septic tank until city sewage comes through. Which we could afford.....until we got into property taxes.... and that is what changed our minds. It would be $500-$600 per month for the taxes on a brand new home! (Our current home is $100/month) We want to use DH's income only for bills/mortgage and mine strictly for savings/emergencies.

So we decided we will just buy. I'm so afraid something would happen and we would lose the house after all of that aggrevation. I am actually relieved now. (You already know the hassle since you built before!) I have a friend (SAHM) who just built without looking into taxes and now she has to get a job so they can afford to stay. So please check into the taxes and all of the extras that come along with the process first.

You are very lucky your first home is paid off, you might want to pay off all of your debts with the profit of the sale and if there is some extra use that for the new mortgage. I would worry about DH's back and his ability to work. I have herniated disks and the pain is crazy some days. Could you build a bigger garage or addition to your home or even buy instead if it's cheaper?

This is just my drama, if you know you can afford it and all the costs with it, best of luck to you! Please let us know what you decide!!

Nicki :)